Commercial Real Estate Advice from a Landlord in Gulfport, Mississippi

This blog is written by a landlord of commercial real estate in Gulfport, Mississippi. Seaway Business Park is a private company, and we watch over every aspect of our business park, which is a 29 acre commercial office and warehouse complex. We have family businesses in the area dating back to the 1940s. This gives us a unique perspective, and we are excited to share the tips and tricks we have learned over the years. Enjoy!

Tuesday, June 7, 2016

I’ll bet you didn’t think a TV show like Shark Tank had much in common with an
industry like commercial real estate.

Below, we go into detail about the similarities between the
hit television show and commercial real estate.

(And we’ll even throw
in abonus section about what we
can learn from each similarity!)

The Pitch

Every contestant on Shark
Tank gives a pitch to the sharks on their product/service.

Similarity?

Commercial real estate brokers, landlords and sellers all
make an initial pitch of their property.

Typically, they have to give a short and sweet initial
“pitch” of the property’s price, location, amenities, etc. to get a prospective
buyer or tenant interested.

Bonus Section: What
can we learn?

You know a good pitch on Shark
Tank when you see one.The best are
ones that are prepared and know the exact message they want to convey.

Tailor your pitch to your audience.If you’re selling a distribution center
that’s right off a major interchange, you should probably focus on the location.

Practice your pitch.Be able to explain exactly what is best about your property.

Remember, first impressions really do count!

The Details

You have to know your numbers!

How often do we hear a shark quickly go out on a deal
because someone can’t recite their profit margins, net income, etc.

Similarity?

This one is fairly obvious.You have to know your numbers!

When a person goes on a property tour, you need to be able
to recite building details and pricing.Be prepared to answer square footages of individual offices and/or
warehouse bays.Know ceiling heights,
applicable zoning, parking ratios, ingress/egress rights – the list goes on and
on.

Bonus Section: What
can we learn?

You know how the sharks instantly go out on deals where the
entrepreneurs don’t know their numbers?

It’s not necessarily because they don’t trust the entrepreneur’s character.

The problem is twofold:

the sharks feel like the entrepreneur might not have
the right priorities– after all, they are investing in a business, not just an
idea, and

the sharks need to actually know the answers!

What we can learn as commercial real estate professionals is
when a buyer or tenant asks a question, they aren’t going to wait for you to go
look up the answer.

You don’t want to be fumbling around and answer every
question they ask with “I can find out for you.”

Study your property ahead of time.

Be prepared to answer all of their questions.

Anticipate what they might ask and your property tour will
go much smoother.

Specialization

After watching a few episodes of Shark Tank, you get a feel for each shark’s specialties.

Daymond is the fashion expert, Lori is the product queen,
Mark/Robert are the tech guys, etc.

Similarity?

Most commercial real estate brokers and professionals
specialize in one or two subsets of the market.

There are obviously exceptions, but most brokers specialize
in one area, like office, retail, industrial or multi-family.

Bonus Section: What
can we learn?

There is a reason Mark Cuban is known as the tech guy on Shark Tank.

Anyone with a technology product is always interested in
partnering with Mark because they know he can dominate that industry.

It’s the same reason an office occupier would not go to a
broker specializing in multi-family sales to find them a new office space to
lease.

Stay in your lane.

Find a specialty and stick to it.

Become the “go-to” broker or landlord in your market for a
certain sector just like Mark has done for himself on Shark Tank.

Be Creative

Whatever your thoughts are of Kevin O’Leary, you can’t
accuse him of not coming up with the most innovative offers on the show.

Typically, the entrepreneurs have a straight offer: Give me
$X dollars and I’ll give you Y%.

But it doesn’t have to always be black and white.

Similarity?

Commercial real estate listings are typically originally
offered in much the same manner as an offer on Shark Tank.

I’ll give you $X/month to lease your space or I’ll pay you
$Y for your property.

There are so many other factors that enter the equation,
such as tenant improvement allowance, lease term, warranties and
representations of a property, security deposits, etc.

Bonus Section: What
can we learn?

Don’t limit yourself to only discussing price.

There are creative ways to solve different issues each party
has.

Do what Kevin O’Leary does – he figures out what the
entrepreneur actually needs and
structures a deal that fulfills that need.

Have a tenant will minimal credit?

Require a larger security deposit that is returned over time if they make
timely payments.

Find a way to make your deal work.

The Offer

Our favorite part of Shark
Tank is when the sharks ultimately make an offer.It’s even better when multiple sharks start
bidding.

Similarity?

The beginning of the Shark
Tank negotiation process is much like the initial proposal in commercial
real estate.

One side knows what the other wants for the property and
makes an offer.

There can be multiple offers on a property or a prospective
tenant can solicit proposals from multiple landlords – just like when multiple
sharks bid against one another.

Bonus Section: What
can we learn?

On Shark Tank,
there is much more transparency than in commercial real estate.The 5 sharks are aware of what the different
sharks are offering (except when 2 sharks get together and start whispering a
plan of attack).

However, in commercial real estate, you are not operating
with full information.

Don’t assume you are the only party making a proposal or
bidding on a property.Modify your
proposals/offers accordingly depending on your needs.

Last but not least:
The Negotiating

Sharks often negotiate back and forth with entrepreneurs
over the amount of equity (and sometimes over other items like debt servicing,
royalty percentages and line of credit amounts).

Similarity?

Obviously, buyers and sellers and tenants and landlords
negotiate back and forth as well.

Bonus Section: What
can we learn?

Different sharks have different negotiation tactics.Mark infamously likes to put entrepreneurs on
the spot and make a quick decision.

However, Shark Tank
is a show that takes place very quickly.

Commercial real estate deals can take weeks or months to put
together.

Negotiation tactics probably won’t work and certainly should
not be attempted if you can’t afford to live with the consequences.

One question sharks often ask is whether it’s really worth
not doing a deal over a couple of percentage points.(Side note: We always wish an entrepreneur
would turn the tables and ask the shark if that’s how they feel, why don’t they part with the extra couple of
percentage points.)

In commercial real estate deals, everyone obviously has
their bottom dollar and top dollar they are willing to take or pay,
respectively.

If someone is within the range of what you would take but it’s not what you think
you should take, you need to weigh
the pros and cons of a vacant building or a building remaining on the market.

Figure in your ongoing costs and whether it really makes
sense to pass on the deal.

You have very seasoned investors who are doling out free
business advice every Friday night.

Don’t take it for granted – see how it can apply to your
commercial real estate business.

Please feel free to leave comments.We promise to read them all.You can also email us with any
questions/comments at leasing@seawaybusinesspark.com.As a reminder, we provide office space for
rent and office/warehouse space for rent in Gulfport, Mississippi.For more information, visit our website at www.seawaybusinesspark.com or call
us at (228) 575-7731.

Thursday, May 12, 2016

This post is applicable to any business in any
industry. But, since we are CRE
professionals, the post is tailored towards (you guessed it!) CRE. We wrote this post as a Q & A. It’s a Frequently Asked Questions of
consuming CRE content, if you will.
Enjoy!

What exactly should I
consume?

Consume content.

Okay, consume
content. Got it. What type of content should I consume (you
may ask…we hope)?

This question is easier to answer in the negative, i.e., what CRE content not to consume.

It will not serve you well to read every real estate blog
post you come across. You could
literally spend all day scouring the internet.
Anyone and everyone with an opinion (including us!) about any type of
industry can post content on the internet.
Having a blog does not make
someone an expert so choose what you read wisely.

If your practice is focused on a particular sector of the
market, it will not help to read about an entirely different sector. You might as well read about a different
industry altogether. If a real estate
broker specializes in high rise office leases, how helpful do you think it will
be for that broker to read about multifamily updates? Sure, you never know what assignment you are
going to receive, but there is no reason to constantly read about an unrelated
market sector.

The same goes for market updates specific to a geographic
region. As landlords in Gulfport,
Mississippi, we very rarely read about market updates outside the southeast
region. Why? There is just too much difference between our
market and theirs. It is a waste of time
when there is so much quality content that is beneficial to read.

Also, if you are a commercial real estate professional, do not read residential real estate blogs (except for marketing tips). The industries are completely different, and there is minimal overlap.

Alright, now I know
what to avoid consuming. Any tips for
finding content I should consume?

There are several ways to seek out relevant content. It is
a time-consuming process but a rewarding one. A good starting place is typing “Commercial
Real Estate Blogs” into Google. Join
LinkedIn groups that are relevant to CRE.
When you find a reliable blog, read the comments section and see if you
can find any content creators there.
Subscribe to newsletters. Listen
to podcasts. Search for people on
Twitter. When you find someone you like
on Twitter, see who they follow and who else follows them.

This process cannot be done overnight. You will find some
authors you enjoy reading and some you do not.
Some people will constantly have typos and some treat blogging more like
a job. Some people post inaccurate
information and some spend a great deal of time making sure the facts check
out.

And don’t think that once you find a dozen websites that
contain CRE content that your search is
over. You should always be on the
lookout for quality posts and authors.

How often should I
consume content?

Weekly. Daily. Hourly.
(Minutely? – Did we create a word?)

We set aside some
time every morning to see what’s going on in the world of CRE. Everyone is different though. You probably should not read every newsletter
you receive the second it hits your inbox or make a priority to listen to a CRE
podcast the minute it is released on iTunes.
That would be exhausting and could turn into a job in and of
itself. Having a set time every day
works for us. Discover what works best
for you and stick with it.

When you say consume
content, are you just talking about news websites and CRE blogs?

Absolutely not! Talk to your CRE colleagues. See what their take is on your local
market. Ask about their recent
transactions.

Search for listings on Loopnet and CoStar. What properties are being sold/leased? What properties just hit the market? What prices are properties selling/leasing
for? How long are properties staying on
the market? Be knowledgeable about your
local market to give yourself an edge.

Be aware of your CRE surroundings when you are driving
around. Do you see a lot of “For Sale”
signs in specific areas? Is there new
construction on a specific road? You can
learn a lot about the local CRE market just by paying attention to what you see
– after all, it’s right in front of you!

Any last tips?

Enjoy what you read.
Find articles and content creators that post items you find relevant and
are easy to read. If you have difficulty
reading posts, STOP! You are not getting
much benefit if you look at it as a chore.
We look forward to consuming content every day and you should too. Make
it enjoyable.

Please feel free to leave questions and/or comments. We read all of them. We provide office space for rent and warehouse space for rent in Gulfport, Mississippi. If you need commercial real estate space in
our area, please give us a call at (228) 575-7731 or visit our website at www.seawaybusinesspark.com.

Tuesday, April 19, 2016

What’s
the most important action you should take after you receive a lead or take a
prospect on a tour?

Follow up.

It’s
really that simple.

We
could stop writing this blog post, pack up and head home. But if we were going to do that, we could
have just kept our thought to 140 characters and put it on Twitter.

Something
like: Most important action after a #CRE prospect lead or tour? Follow up!

See! We even have 60 characters to spare! And we probably found our title when we post
this on Twitter!

Okay,
so why is the follow up so important?

Because
without the follow up, you are playing the waiting game. And staring at the phone, waiting for it to
ring, is no fun. It’s also not
productive.

Following
up gives you all the information you need to know, both positive and negative.

Oftentimes,
a prospect says, “I’ll let you know either way.”

Guess
what? People do not like to deliver bad
news. And if the prospect is not going
to lease or buy your property, they are not going to call back.

So if
the prospect is going another direction, what’s the point of following up?

Where
do we begin?

Maybe
the prospect checked with corporate and there’s another 3 years left on their existing lease. They loved your property but
won’t start looking again for 2 years.
Wouldn’t that be useful information?

Maybe
you quoted a higher rental rate than the company has budgeted. Wouldn’t you like to at least have a chance
to take another look at your numbers to see if you can come to terms on a price
that will work for both parties?

Maybe
you offered a 7 year lease term and the company will not sign more than 5
years. Wouldn’t you like to have a
chance to come up with another proposal?

Maybe
the space you showed them was not configured the right way for their
needs. Wouldn’t you like to chance to
offer some sort of build-out/concessions to get the tenant/buyer into the
building?

The
list literally goes on and on.

Sure,
there are some situations that even with a follow up, there is nothing that
could have been done.

Once
you know this, you can use it to your advantage for the next prospect and either
rule them out or qualify them earlier in the process.
This saves everyone time and allows you to focus on a more productive
deal.

Some
people will say that they don’t want to bother the prospect and that if they’re
going to lease/buy the building anyways, what’s the point of following up too
early.

Our
answer: No reasonable company will decide not to sign a lease just because of a
simple phone call. If they were going to
lease/buy, they are still going to lease/buy.

We are
not advocating becoming a pest and calling someone several times per day. That might turn a prospect off.

But a
simple phone call is harmless.

And these
days, there are numerous ways to follow up.
You can make a phone call, leave a voicemail, send a text, send an
email, send a message on LinkedIn, etc.

Don’t
allow yourself to fall into the trap of assuming your prospect will call you
back.

Set a
reminder for yourself that if you haven’t heard from Prospect X by a certain
date, you will follow up to find out a status.

More
often than not, you’ll come away with good information. Even if it’s a negative response for your
building, it’s still good information,
because you can then focus on the next prospect.

Please feel free to leave questions and/or
comments. We read all of
them. Feel free to email us
atleasing@seawaybusinesspark.com. We provide office space for rent and
warehouse space for rent in Gulfport, Mississippi. If you need commercial real estate space
in our area, please give us a call at (228) 575-7731 or visit our website at www.seawaybusinesspark.com.

Tuesday, March 29, 2016

How do you find office space to rent in the Gulfport/Biloxi
area in Mississippi?

As landlords for commercial real estate, it is our business
to know how to find office space.

After all, we need to make sure that our office space is everywhere people would potentially look for office space.

So, where can you find space?

First, there are the listing websites: LoopNet, CoStar and the MLS (multiple listing service).

LoopNet, CoStar and the MLS are the “go-to” commercial real
estate websites that most commercial real estate professionals will first do a
search on.

However, LoopNet and CoStar typically only contain broker
listings and/or commercial real estate landlords who have more than 1 property.The downfall to some of these sites is the
brokers/landlords have to pay to have a “premium” listing on the site.

What this means is if you do not have a search subscription on
a website like LoopNet, you will only be able to see the premium listings and will miss out on
all the free listings.Most office
building owners who only own one building cannot afford to put a premium
listing on LoopNet because the pricing model does not make sense. (Please note that this is only the case for the Gulfport/Biloxi market - in a city like New Orleans where someone owns a high rise office building, this building will likely have a premium subscription on a website like LoopNet.)

Besides the major listing websites, there are several
other websites that have commercial office space listings.

There’s OfficeSpace.com,
Cityfeet.com and Rofo.com.Cityfeet requires a paid subscription to list as does Rofo. One unique aspect of Rofo is it allows you to post a space need and allow the landlord/listing broker to contact you direct. Our personal favorite is OfficeSpace, as it allows the owner to publish a listing with no strings attached. In our experience,
these websites have much of the same listings because if a commercial real
estate professional knows to put their listing on one of these websites, they
will put them on all of these
websites.

You can also find office space on Craigslist.Craigslist has a wide range of properties and
will often let you contact the listing owner directly.(As opposed to a website like LoopNet where
you will most likely be contacting a listing broker.)

We are often surprised by how many of our leads for office
space come from people finding space the old fashioned way – driving around!

The Gulfport/Biloxi market is a fairly small market for
commercial real estate.Because of this,
if you have an idea of where you think you want your office space to be, you
can probably just drive around and write down phone numbers from signs for a
couple hours.

First figure out a convenient place for your customers (like
locations just off or on major roads like Cowan/Lorraine, Highway 49, Pass Road)
and drive around.Easy enough, right?

These days, we find more and more people are just typing in “office
space for rent” on Google and Bing to start their commercial office search.

Going to Google will bring up most of the websites mentioned
above, in addition to websites like ours (www.seawaybusinesspark.com!) who
are independent landlords offering office space.

If you are having trouble finding exactly what you are
looking for, you can always contact one of the local commercial brokers, who
can aid in your search for commercial office space.

Thursday, March 10, 2016

A local businessperson, we’ll call him Business Bob, once
told us over lunch that he will give anyone 5 minutes.

Five minutes for what?

Five minutes for anything.

Business Bob said if someone wanted to come to him for an
investment opportunity, a business plan/idea, an interview, whatever, he would
make the time to either talk on the phone or sit down with that person.

Business Bob has had great success over the several decades
his company has been in business and continues to thrive and expand.

A great deal of Business Bob's success is attributable to this mindset.

So, how can we apply this to commercial real estate?

As commercial real estate professionals, we are always
searching the next deal.

We try to keep our pipeline full through prospecting and
networking but oftentimes, our next big project is just a phone call (or these days, an email) away.

Our company has made a habit of always talking to any prospective tenant who calls for office space
or warehouse space.

Sometimes, we know the call is highly unlikely, maybe even
impossible, to lead anywhere like the following:

We were recently notified about a prospect who wanted to
open a food processing plant within our business park. Their needs were several thousand square feet
of heated and cooled warehouse space and some very specific electrical
requirements for the commercial food processing equipment.

Did we have anything even close to this requirement that
would work?

Nope.

Did we take the call anyways?

Yep.

Was it a waste of time?

No way.

How can that be?

We took the time to listen to this prospect’s needs and get
an idea of their business plan/model moving forward in our region.We figured that at some point, this prospect
might have a different requirement. Maybe at that time, the prospect could utilize one of our spaces.Plus, this business might be a potential
referral source.

If we had just said no from the start, we would be closing
the door on any future business and/or referrals.

Have we gotten any future business from that client or any
referrals?

Again, no.

So how can it be that it was not a waste of time?

Take the following example that did pay off:

A number of years ago, we got a call from a national credit
tenant (Fortune 100) who needed some space.

Their requirements were 25,000 square feet of warehouse space with
a couple of private offices.The kicker
was the company only needed space for 1-2 months.We were told that they were renovating their
existing location and needed space while the construction was completed.

Our company typically shies away from leasing space
temporarily because we may pass up a long term deal.Plus, we didn’t have even half of that amount
of space vacant.

Did we still take the call?

Yes.

Did it lead to future business?

At first, no.

We took the local people on a tour of what we did have
available, and they felt like they could make it work if absolutely necessary.

The next day, we received a call from the company’s regional
office and corporate office.

We told the regional manager that we were flattered to
receive the call but just did not think we could make the deal work.

Our company had minimal space left to lease.We had a few prospects for the remaining
vacant spaces and did not want to pass up those opportunities.Plus, we did not think it was a good fit for
the company either.

The regional manager said he understood.

So where’s the part about the big payoff?

The regional manager’s next question: Can you do a
build-to-suit?

Our answer: Of course!

The corporate office was calling to ask the same question.

Apparently, the local office was having some issues at its
current location and was deciding to either fix it or relocate.The building was old and was not the typical
layout of their other locations around the country.

They made the decision to either find an existing building
to retrofit (they couldn't find one) or do a build-to-suit.

Had we not taken the initial call, we might not have ever
been presented with this opportunity.

And before you ask the question, yes, we did perform a build
to suit and they are still a tenant.

Not a bad return on investment for a 5 minute phone call,
right?

Please feel free to leave comments. We promise to read
them all. You can also email us with any questions/comments at leasing@seawaybusinesspark.com.
As a reminder, we provide office space for rent and office/warehouse space for
rent in Gulfport, Mississippi. For more information, visit our website at
www.seawaybusinesspark.com or call us
at (228) 575-7731.